A c|net editorial posits that Google may be well on its way to developing a complete suite of internet-based services that could act as a computing environment for any thin client that's capable of accessing it. And Microsoft may be planning a similar move.

It may not be an "os" but web deployed apps are here. I did my taxes this year with quicktax online. It only cost me $15CAD, not the $30 the pc version costs. I use webmail all the time.
I use msn's web based messenger sometimes. I even play web games(flash/java).